US real gross domestic product fell by 3.5% in 2020 amid the Covid-19 pandemic, the worst annual decline in 60 years, according to the quarterly University of California Los Angeles Anderson Forecast. However, the forecast estimates 6.3% growth in real GDP in 2021.
In addition, it estimates GDP growth of 4.6% in 2022 and 2.7% in 2023.
“For the economy, a waning pandemic combined with fiscal relief means a strong year of growth in 2021 — one of the strongest years of growth in the last 60 years — followed by sustained higher growth rates in 2022 and 2023,” UCLA Anderson Senior Economist Leo Feler wrote in an essay.
The Anderson Forecast also projects the US unemployment rate will average 5.2% in the fourth quarter of this year. Projected rates in future years are 4.1% in the fourth quarter of 2022 and 3.7% in the fourth quarter of 2023.
“Recovering labor force participation will slow the decline in the unemployment rate as workers who exited the labor force, including those who left for childcare and home-schooling responsibilities, reenter and begin looking for work,” according to the forecast.
The forecast noted the economic damage in 2020 could have been much worse without government action such as the Paycheck Protection Program, extended unemployment insurance and stimulus checks.